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BACK-TO-SCHOOL SALES WEAKEN AS PARENTS FEEL MONEY PINCH, TAKE CONTROL OF CHILDREN'S SPENDING
Charleston, SC, July 28, 2010.... Early predictions of strong back-to-school sales are now in doubt due to 24.2% of parents planning to spend less this year compared to 2009, according to findings of the latest Consumer Mind Reader(tm) survey released today by America's Research Group (ARG) and UBS.
Of those parents cutting back, over half (52.4%) said they are doing so because they have "less money" compared with 41.8% last year. Last year "higher debt" was a big problem for 40.5% of these parents, but that has dropped to 28.6% this year.
As a result, parents are taking more control over their children's spending. This year only 24.2% of parents -- an all time low - say that their children would decide 60% or more of back-to-school spending. That figure was 29.7% last year.
"When penny-pincher parents take over, spending levels fall sharply and discount or off-price stores benefit," said consumer trend expert C. Britt Beemer, CEO and Founder of ARG, "but retailers still have a chance to post positive sales if they give parents big discounts," he added.
The bottom line, according to Beemer, is that more and more people are spending less for back-to-school purchases. Last year, 39.1% of parents said they would spend $300 less for back-to-school clothing. That number sharply increased to 44.5% who will spend $300 less this year.
Wal-Mart will be the first shopping destination for back-to-school clothing for 20.7% of parents, followed by Kohl's in second place with 10.8%, and Target third at 8.5%. Last year, the top three stores for back-to-school were Wal-Mart (22.3%), JCPenney (11.4%), and Target (10.5%).
Over half of parents (51.4%) say they will try to get their children to wear last year's clothes, up slightly from 50.9% in 2009.
The survey revealed that shoe sales will be extremely weak as only 9.4% of parents expect to spend more on shoes this year. This is the lowest rating since ARG started asking the question in 2002.
"Two months ago, we estimated back-to-school spending would be up 5% to 7%, but after this study we have downgraded our prediction to be up only 1% to 3%," Beemer said.
The ARG/UBS Consumer Mind Reader Survey consisted of 1,000 telephone interviews conducted Monday through Thursday, July 5 to 8, 2010, at ARG headquarters in Charleston, SC. The error factor is plus or minus 3.8%.
America's Research Group, one of the nation's foremost consumer research and strategic marketing firms, marked its 30th anniversary in 2009. CEO Britt Beemer is a key resource and advisor to leading brands and top retailers. He is author of The Customer Rules, published by McGraw-Hill.
UBS Global Equity Research provides the broad global perspective and in-depth analysis that institutional investors need to make good investment decisions. With more than 600 analysts, associates, strategists and economists in EMEA, APAC and the Americas, UBS covers approximately 85% of the world market capitalization - over 3,300 companies worldwide across 46 different markets. In addition to UBS's disciplined fundamental research, clients also rely on UBS for corporate and expert access to give them the insight they need, when they need it.